Actually I talked to the dev working on threshold consensus for them before it was public. Yeah of course there has to be cost its not about cost its about accessibility. The flood attack has been addressed by having pow be the gas and higher pow being the fee price. If they flood they would need to do far more pow to push up the fee than you would need to do for your transaction. Like if a block can fit 200 transactions they would need to do 200 more pow to push the pow you would need up by 1. It’s highly costly for no real gain.
What are the economics of using the free-market exchange value of a PoW token to pay for Gas for transactions using a transaction-abstraction mechanism?
For example, say there is a transaction relay service which will submit a tx on your behalf in return for you providing proof-of-work. The PoW token is bound to that specific transaction, and can only be redeemed when submitting that tx.
There is also a market maker who will exchange Ethereum for proof-of-work tokens, the transaction relay service uses this market to recover the Gas cost of submitting your transaction. So, relay service takes your proof-of-work, which can only be redeemed by submitting their transaction, and in turn exchanges that for enough ETH to cover the transaction costs.
That seems a bit long-winded, and raises the question of the inherent value of your proof of work being valued /valuable enough for it to make sense - I think introducing the notion of value, and economics and a market, makes it way more complex than just an anti-spam mechanism…
As a purely anti-spam mechanism the PoW has no exchangeable value but serves a purpose, in the other case (described above) the market maker would then need to find buyers for the PoW tokens to speculatively convert it back to ETH to make a return-on-investment.
Why would anyone pay for the token though. I think having a token be the focus just isn’t the reason for having the system. It’s not really about the pow but the open access that’s why the token would only give you .5 of its pow when burned than if you did the pow.
It’s value honestly would only be the utility of using it if you just cannot or dont want to do the pow. Because of the .5 it might just be that noone will make them and hopefully the network could be used on whatever you want.
I think this is a good way to allow more users to participate in the network without having a native token (e.g., ETH), which I believe is one of the barrier of growing blockchain user base.
A couple of more concerns:
- Fairness: A GPU in mining farm may be several orders of magnitude lower cost (in terms of electric cost) than a cellphone mining.
- Incentive and security model: PoW is well defined, but may need more clarification on PoW-based TX.
Several thoughts if we apply this to Ethereum-like system:
- A user can submit a TX using either ETH and/or PoW in a transaction
- The block’s work (difficulty) may be the summation of block header + all work’s from PoW-based TX. This incentivizes miners to include the PoW-based TXs
- A PoW-based TX only evaluates HASH(source_addr+source_addr_nonce+nonce) so that a PoW-based TX’s nonce could be pre-computed ahead
- To allow cellphone mining, Ethash may be replaced by a hash algorithm with less memory consumption (such as CryptoNight or QkcHash).
So if I understand what you are saying, mining PoW needs to compete against a lot of other people who are trying to get Ether, while the proposed transaction PoW only needs to compete against people who are trying to get transactions in.
But the entire purpose of Ether is to spend it to get transactions in. So in my naive analysis, I was confused about why there would be a difference. But I was not taking the speculative value of Ether into account. So your scheme is useful so long as Ether is valued by the market above its utility of getting transactions into blocks.
I still don’t know where to start on the PoW token. What is the main economic difference between the PoW token and Ether?
Yeah the gpu would probably have an advantage but this might be able to be mitigated through constant change of the algo as gpu implementation takes time. The token would just allow for offloading and more flexibility than you having to do the pow when you do the transaction but always prefer to do it fresh due to the .5 efficiency of the token to pow but I’m really open to how this works or just not having it. Both would be valid. I really like the block pow idea. Was thinking that you would get part or the tokens or part of the full pow in tokens for incentivisation. Im open to how the pow gets implemented just worried about precomput risk. Yeah the algo will probably change.
Yeah that is how ether honestly used to be designed it was not supposed to have have value very early and was just to be for gas but now has become highly speculative which ups the difficulty and cost of getting eth.
Unlike eth the token would not be fixed rate of supply and thus should stay close the actual cost of doing the pow. The .5 fee on token pow would be to allow for incentivisation on blocks and for allowing anyone to use the network if they can not or do not want to do the pow themselves but this could be replaced by other mechanisms like you just paying for the pow on the transaction directly.